American dollar depreciates as the stock market moves forward

Today's expected range for the Canadian Dollar against the major currencies:

US Dollar         1.2550-1.2650

Euro                 1.5000-1.5100

Sterling            1.7500-1.7600

The US Dollar Index is marginally weaker this morning as the stock market again moved forward yesterday on a US inflation report that was not as bad as some suspected, on the Biden stimulus plan being passed by Congress and finally this morning the European Central Bank leaving interest rates at current levels but promising to speed up their purchases of EU bonds to help keep those interest rates lower. The Euro jumped on this news with EUR.USD trading as high as 1.1970 overnight up from yesterday's low of 1.1870 while EURO.CAD remained range bound as the Loonie was also able to pick up some gains against the US Dollar.

USD.CAD opens the day at the 1.2580 (0.7949) level, it will be interesting to see if the currency pair can create a sustained move below the 1.2600 (0.7937) level for the first time in a number of weeks. Yesterday saw the Bank of Canada keep interest rates at their current level of 0.25%, they expect that GDP in the first quarter will be positive but they maintained that there is still a lot of uncertainty in the economy due to the virus and the speed of the vaccination program. They are also expecting a short-term jump in inflation but have indicated that they will let it run as they expect it to moderate in the second half of the year. All-in-all nothing really new from the Bank in this statement and the Loonie should continue to trade as a result of movements in the US Dollar.